What is a Bitcoin transaction?

A Bitcoin transaction is a transfer of bitcoins between two or more addresses on the Bitcoin network. It is a fundamental operation in the Bitcoin system and serves as the means by which bitcoins are sent, received, and managed.

Here's how a Bitcoin transaction typically works:

1. **Initiation**: A Bitcoin transaction begins when a user decides to send bitcoins to another party. The sender creates a digital message containing information about the transaction, including the recipient's Bitcoin address, the amount of bitcoins being sent, and any additional data such as transaction fees.

2. **Signing**: The sender uses their private key to digitally sign the transaction message, proving ownership of the bitcoins being sent. This signature ensures that only the rightful owner of the bitcoins can initiate and authorize the transaction.

3. **Broadcast**: Once the transaction is signed, it is broadcast to the Bitcoin network, where it is propagated to all nodes (computers) participating in the network. This allows the transaction to be verified and included in the next block of transactions to be added to the blockchain.

4. **Verification**: Nodes on the Bitcoin network independently verify the validity of the transaction by checking various factors, such as the sender's balance, the correctness of the digital signature, and the absence of double-spending. If the transaction is deemed valid, it is included in a block and added to the blockchain.

5. **Confirmation**: After a transaction has been included in a block and added to the blockchain, it receives confirmation. The number of confirmations a transaction has depends on the number of subsequent blocks added to the blockchain. More confirmations increase the security and irreversibility of the transaction.

6. **Completion**: Once a transaction has been confirmed, the recipient's Bitcoin address receives the specified amount of bitcoins, and the transaction is considered complete. The recipient can now use the bitcoins received for further transactions or store them securely in a wallet.

Overall, a Bitcoin transaction allows users to transfer bitcoins securely and transparently without the need for intermediaries or central authorities. It forms the basis of the decentralized peer-to-peer payment system that underpins the Bitcoin network.